Solo 401(k) Eligibility
7 articles
Who counts as an employee for Solo 401(k) disqualification?
A Solo 401(k) is available exclusively to owner-only businesses, meaning the business has no employees who must be offered retirement plan benefits. But not every person who does work for your business counts as a qualifying employee. Understanding ...
Can my spouse participate in my Solo 401(k)?
Yes, a spouse who is compensated by your business is eligible to participate in your Solo 401(k) as a plan member. A participating spouse does not disqualify the plan. In fact, including a spouse can meaningfully expand the plan's contribution ...
Do my other businesses affect my Solo 401(k) eligibility?
Potentially yes. If you own or control more than one business, the IRS may treat those businesses as a single employer for retirement plan purposes. When that happens, employees across all businesses in the group are counted together, and if any ...
Can I have a Solo 401(k) if I also have a day job?
Yes. Having a W-2 job with another employer does not disqualify you from establishing a Solo 401(k) for your own self-employment activity. In fact, this is one of the most compelling scenarios for a Solo 401(k), and something we commonly work with. ...
What is a Roth Solo 401(k)?
A Roth Solo 401(k) is not a separate plan type; it is a standard Solo 401(k) with the Designated Roth Account feature enabled. The same plan holds both pre-tax and Roth savings in separate sub-accounts. The key distinction is how contributions are ...
Can I move a stock market Solo 401(k) to self-directed?
An existing Solo 401(k) held at a brokerage firm can be converted to a self-directed plan. The plan itself does not change, but the plan document and administrative structure do. To make a conventional Solo 401(k) self-directed, the brokerage's ...
Do I need an LLC inside my Solo 401(k) for investing?
No, your Solo 401(k) trust already has full authority to hold and manage any IRS-permitted asset directly, so forming an LLC isn't required to invest. Some investors set one up anyway, though, specifically to wall off the liability from a single ...